How To Remove Collections From Your Credit Report


Collections happen when the creditor has passed on the debt to an agency for collection. The lender has written off the debt from their books. This usually happens when the creditor has tried to get paid for at least 180 days.


A collection can affect your ability to obtain further credit. When you see this item on your credit report, you may be able to get it removed.


Removing a collection from your credit report

There are a number of ways to have the deleted from your record.


Dispute it

You may spot mistakes with the information regarding the collection. These could be:


● The amount of the debt is wrong

● It is older than seven years

● Your name or other personal information is incorrect

● The creditor’s information is inaccurate


If you spot errors, you can ask the credit bureau to look into them and remove the collection.

Submit a pay for delete letter

With this option, you send a letter to the debt collection agency. In the letter, you ask them to remove the collection in exchange for you paying off the debt.


Some companies may agree to do so, but they don’t have to. If they do accept your offer, ask them to confirm so in writing. Then forward a copy of this to your credit bureau.


Goodwill deletion

A goodwill deletion occurs when you have paid the debt in full. After you have settled the debt, you write a letter of apology to the lender or collection agency. You provide evidence that your credit has improved and ask for the collection to be removed.


This doesn’t mean the creditor or agency is under an obligation to agree. If they do, then it could increase your chances of obtaining further credit from other companies.


Wait for the negative item to leave

If you have been unable to get the collection removed, you will need to wait for seven years. The impact that the collection has on your credit score decreases over time.


After seven years, the collection expires and can be deleted from your credit record.


How does a collection affect my credit score?

As we mentioned, the overall effect collections have on your credit score diminishes as time goes on.


If it is a new item on your credit record, then your score will be influenced if the collection is unpaid. The newest version of FICO disregards paid collections.


The weighting system of FICO has payment history making up 35% of your total score. So if a collection is removed from your credit report it could boost your score.


Conclusion

Collections occur when a creditor has sought payment for at least 180 days. They can negatively affect your credit score.


If you think that a mistake was made you can provide evidence to the credit bureau. Alternatively, you can ask the creditor to remove the collection in exchange for you making payments. However, the creditor doesn’t have to agree.


As time goes on, the effect that a collection has on your credit score decreases.